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Digital transformation continues to be a top priority for many organizations in 2019. One recent survey found that 70 percent of respondents reported that their companies either have a digital transformation strategy in place or are working on one. Yet, there continues to be some speculation on whether digital transformation is hype or reality. Recently, articles in both HBR and Forbes have reported that many digital transformations fail, and an increasing number of experts have recognized that improving business results with digital involves much more than just the technology itself.
Five years ago, researchers at MIT found that leading digital companies were deploying technology to transform in three key areas: customer experience, operational processes and business models. Even then it was clear that digital transformation has to involve a fundamental shift in perspective. Industry subject matter experts such as Jason Bloomberg and Mark Samuels have recognized the importance of viewing the business from the “outside-in”, redesigning end-to-end business processes and executing organization wide cultural change.
Precisely how to do this is still less clear. However, there is an increasing appreciation that the traditional mindset of leaders in approaching digital business in a departmental context has been problematic. We believe that a customer centered, business process context is a far more effective way of viewing the business in attempting large scale change driven by digital. Digital can be central to improving customer experience, but the results will be sub-optimal if the effort is executed department by department. Similarly, digital can significantly improve operations, but the results will be sub-optimal if the effort is mainly executed department by department. This is also the case in applying digital to business model innovation.
A high level customer journey map is the basic building block that is needed for success with digital transformation. Many companies already emphasize key touchpoints or “moments of truth”, but the more important perspective to drive digital action is the customer’s end-to-end journey. Such a customer journey map (CJM) is only effective when it is discussed by the senior leadership team and is shared throughout the organization. Then, clarity around the definition of the organizations high level, value creating enterprise processes is also needed for insight on how these processes create value at each touchpoint along the journey. Typically, there are no more than 8 to 14 such enterprise level processes in most organizations. Once these two key elements are in place, the organization can begin to view the business from the outside-in and in a business process context. It also leads to a more balanced approach to measuring operational performance.
Process management is central to success as it is needed to improve customer experience as well as operational processes and execute business model innovation. Note that process management and business process management systems (BPMS) are quite different. Process management is far more than just the technology. It’s a management discipline which involves close collaboration across departments in the definition, improvement and management of a firm’s end-to-end enterprise business processes to create value for customers. Accordingly, the effective application of process management requires a shift of management attention from departmental activities to the value creating flow of work that typically crosses organizational boundaries. Process management accelerates progress with digital transformation by acting as a critical catalyst. Forrester has recognized that customers don’t care about how a company is organized – they don’t care about departmental boundaries — they expect a seamless, efficient, and transparent experience.
Consider the role of Robotic Process Automation (RPA) in improving customer experience and operational performance. While RPA operates at the task level and not the end-to-end process level, it can be a useful tool as part of an overall digital initiative. When RPA is deployed in a departmental context, then the issues and disconnects that exist due to lack of cross departmental collaboration and the adverse impact of data silos will go unobserved and unresolved. Viewing the business in the context of end-to-end processes will detect and highlight these issues. Further, when it comes to taking advantage of advances in artificial intelligence (AI), one study concluded that very ambitious initiatives are less likely to be successful than so called “low-hanging fruit” projects that enhance business process performance. Again, a customer centered, process management context can accelerate progress with digital transformation.
There are several essential elements for success in using process management to accelerate digital transformation. First, a diligent focus on the end-to-end customer experience. Next, clarity on the definition and current level of performance of the organization’s end-to-end business processes. Then, the ability to connect process performance to touchpoints along the customer journey is arguably the glue that holds it all together. This may require unprecedented collaboration across departmental boundaries as well as between customer experience professionals and process management professionals in the long term effort of establishing digital as a core competence.
Has your senior leadership team started to shift attention from what individual departments do to how groups collaborate in creating value for customers?
Do your people have the needed skills to establish digital as a core competence?
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